Some taxpayers are required to file a tax return because of certain income they received, but they choose not to. If that’s you, you run the risk that the IRS will file a tax return for you. If the IRS files a tax return for you it doesn’t mean that your tax problems are over. In factm if the IRS files a tax return for you based on the information that the IRS has, it could mark the start of even more problems for you.

As you probably know by now, the IRS gets certain documents each year and these documents include copies of W2 earnings statements from employers and copies of W2G winning statements from casinos and copies of 1099 income statements from banks and brokers. Every time these documents are prepared for you, the taxpayer, the IRS is sent copies. And if you fail to file a tax return the IRS uses their copies of these statements to create a tax return for you. And the problem is the IRS doesn’t know about your deductions — it knows about your income but it doesn’t know if you had business expenses, or gig expenses, or gambling losses that might offset casino wins. And because the IRS only knows about that income, and not your normal and legitimate deductions, that IRS-prepared tax return could show you owe a lot of money and a lot more money than you should be paying.

This is the big danger if the IRS prepares a tax return for you, and it’s wise that you file your own tax return. Let’s go over some of the trouble spots again:


If you gamble in casinos, for example, it’s very important that you offset your W2G wins with your losses. Without your own gambling records, the IRS will know nothing about your losses.

If you are a gig worker the IRS will have copies of your 1099 forms showing your income but it won’t have any information about your business expenses including deductions such as mileage and advertising and costs of goods. 

This is why if you are missing a tax return you should consult with a tax professional about preparing missing returns and submit your complete numbers — income and deductions. 


Also remember that you may be entitled to a refund when you submit tax returns from previous years. But keep in mind that there is a time limit for claiming refunds from previous years. That time limit is usually three years from when the tax return was originally due. Again, this is another reason why you should file your tax return and not let the IRS do it.


Unfiled tax returns must be cleared up if you need help with your tax debt and want to use the IRS Fresh Start Program or the IRS Offer In Compromise Program. Having previous tax returns filed is among the requirements for the Fresh Start Initiative and the Offer In Compromise.

If you have tax debt and you nee help, consult with a tax professional about the Fresh Start Program and the Offer In Compromise Program. If you call us, we generally can tell you in fifteen minutes if you are eligible for the Fresh Start Initiative or the Offer In Compromise Program. The phone call and the consultation with our experts is free.

To sum it up, letting the IRS file a tax return for you is like financial Russian roulette and you don’t know what’s in the chamber when the spinning stops. So make the call to your tax professional as soon as possible. In some cases, you may need to use the IRS Fresh Start Initiative or the Offer In Compromise program to deal with a big tax debt from previous years and then having all your tax returns properly filed will become crucial.